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So I filed my taxes today and got a huge surprise. I owe the Federal Government money. Turns out, my wife's employer (Oakwood Preschool) some how changed her dependents in 2012 to 10 from 0 without her consent. Since she didn't make much to begin with we didn't really even notice the difference in her checks. And last year we got a pretty good tax return. So there were no real red flags till this year. Now that we owe the government, what can we do to her employer since they obviously had to break some federal law?

She should have a W-4 on file with her filing status, dependents, exemptions etc.. that is where you should start. If her withholding's do not match with her W-4 then you could have a case. So did you, or her, not notice that she was no longer having any federal w/h being taken out?

FYI...people in general should never trust completely in their employer, or their employer's payroll service to prepare their payroll correctly very single time. Employers and payroll services make mistakes all the time and the best way to keep it from biting you in the ass is to review every pay stub you receive and make sure everything looks kosher...if you do not receive a pay stub you should request one.

I'll chime in as both a CPA and an attorney. Won't comment on their changing the W-4 on their own, though... BUT, if her exemptions went from 0-10, then, yes, less would be withheld. No clue why they'd do that, though. But, hey, if you don't owe any penalty with it, then you got to have use of that money all year instead of the government having it.

Another reason you might owe more... check your income as compared to prior year. Check your deductions as compared to prior. Did you leave anything out? Are you being limited whereas you weren't before? Have a kid turn 17? If so, bye bye child tax $1000 credit for that kid.

LOTS of reasons why you'd owe this year over last, most, if not all of which, have nothing to do with that change to her W-4.

So I filed my taxes today and got a huge surprise. I owe the Federal Government money. Turns out, my wife's employer (Oakwood Preschool) some how changed her dependents in 2012 to 10 from 0 without her consent. Since she didn't make much to begin with we didn't really even notice the difference in her checks. And last year we got a pretty good tax return. So there were no real red flags till this year. Now that we owe the government, what can we do to her employer since they obviously had to break some federal law?

No offense but whose fault is it really? You owe the money...pay it! Did you not notice an increase in take home percentage when the entire country is having more money taken out if their checks every day? I can see where you might be annoyed at her employer...but go ahead and sue them/get them in trouble and you won't have to worry about withholding I the future. Personal responsibility is a thing of the past...always someone else's fault.

I am not a lawyer but I pay my fair share of taxes and so should everyone else

Here's what you do; just give the IRS a buzz. Let whoever answers the phone know that, with the Feds unlimited ability to "print" new money, you don't see why the government needs to collect taxes in the first place. And whatever money you may owe, you're positive the Fed can "create" it and have it "injected" in no time. They'll totally understand.

If you feel very strongly, you can refuse to pay taxes and argue that the income taxes are unconstitutional. LINK. However, if you choose this option, you might end up in jail because the federal government does not like anyone not paying taxes no matter how meritorious is your constitutional argument you don't owe them.

The other advice I can offer you is now that you know you owe the taxes, you should wait until April 15 to file.

PS: You probably also owe the State of SC money assuming you live here.

We had a similar experience. This was caused by 1) our family's annual taxes increased; and/or 2) the government reduced the amount of withholdings from people's paychecks as a Keynesian attempt to "stimulate" the economy.

Yes, I am a lawyer. No, I don't know what in the hell I'm talking about any more than any lay person because I am not a tax lawyer. Tax law is a highly specialized field, and it is boring as h@ll.